Crypto fund manager Bitwise liquidates XRP

Crypto asset management firm Bitwise Asset Management announced the liquidation of the XRP it acquired to back its Bitwise 10 Crypto Index Fund.

According to a Dec. 23 announcement, Bitwise liquidated its position in XRP because the U.S. Securities and Exchange Commission (SEC) filed an enforcement action alleging the No. 4 token by market capitalization is an unregistered security. Exchanges could face legal consequences of their own if the SEC prevails, as only registered broker-dealers are allowed to trade securities. 

“The Bitwise 10 Crypto Index Fund does not invest in assets that are reasonably likely to be deemed securities under federal or state securities laws,” the statement said. “Bitwise’s decision to liquidate its position in XRP was based on consideration of new public information from the SEC’s complaint.”

This is just the latest of a long list of the consequences of the SEC’s action against XRP and Ripple. The action caused the token’s price to go tumbling down over almost 40% over the last 24 hours, reaching a price of $0.31 as of press time, according to CoinMarketCap data.

Furthermore, as Modern Consensus reported earlier today, at least three small cryptocurrency exchanges already halted XRP trading, but experts suggest that more are about to join them.

Bruce Fenton, the CEO of security tokenization firm Chainstone Labs commented in a tweet: any crypto exchange who doesn’t delist XRP this week is out of their mind. If the SEC says it’s a security you’d be crazy to list it without a license.”

No separate peace

Ripple CEO Brad Garlinghouse answered the SEC’s pursuit with apparent confidence, and heavily criticized the regulator’s decision to take action against the firm. As Modern Consensus reported yesterday, Garlinghouse argued that the SEC “should not be able to cherry-pick what innovation looks like. […] Make no mistake, we are ready to fight and win — this battle is just beginning.” 

In a post he published earlier today, he claimed he and Ripple Executive Chairman Chris Larsen refused to settle separately with the regulator. Garlinghouse said:

“Chris and I had the option to settle separately. We could do that, and it would all be behind us. NOT happening. That’s how confident Chris and I are that we are right. We will aggressively fight — and prove our case — through this case we will get clear rules of the road for the industry here in the U.S. We are not only on the right side of the law, but we will be on the right side of history.”